Carolyn D. Fenderson - Page 9

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          469(c)(1); Fowler v. Commissioner, T.C. Memo. 2002-223; sec.                
          1.469-9(e), Income Tax Regs.                                                
               The parties disagree on a number of different points                   
          concerning the application and relevance of section 469 to                  
          petitioner’s rental activities.  Among those disagreements, they            
          dispute whether section 469(c)(7) applies.  Petitioner claims               
          that section 469(c)(7) applies to her for the year in issue, and            
          therefore section 469(c)(2) does not apply for that year;                   
          respondent disagrees.  Under the circumstances, if section                  
          469(c)(7) does not apply to petitioner for 2002, then she is                
          subject to section 469(c)(2) for that year, which means that the            
          rental loss is a passive activity loss and she is not entitled to           
          the rental loss deduction here in dispute.                                  
               Section 469(c)(7) does not apply to a taxpayer unless, in              
          addition to another requirement, “more than one-half of the                 
          personal services performed in trades or businesses by the                  
          taxpayer during such taxable year are performed in real property            
          trades or businesses in which the taxpayer materially                       
          participates”.  Sec. 469(c)(7)(B)(i).  In this case, the equation           
          contemplated by the statute requires that we measure the extent             
          of the personal services that petitioner performed as an employee           
          of Symantec against the personal services petitioner performed in           
          real estate trades or businesses in which she materially                    

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